A Practical Guide on Trademark
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1 A Practical Guide on Trademark
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3 table of contents 1. Introduction Fact Sheet of Hong Kong Trade Mark Why are trade mark registrations in Hong Kong important? Registrability of Trade Mark in Hong Kong Classification Trade Mark in Chinese Character Trade Mark Protection in Hong Kong Squatters and Trade Marks Un-registered Trade Marks Search and Registration Requirements Application Procedure Claiming Priority International Trade Mark Registration Trade Mark Opposition and Invalidation Infringement and Litigation Our Trade Mark Practice contact us
4 This publication is intended to be an outline of the law and procedures on this subject for the purpose of general reference only and cannot be relied upon as legal advice in any particular case. If any advice or assistance is needed, please contact this firm on or us at ONC Lawyers June 2011 ONC Lawyers All right reserved. 3
5 1. Introduction Brand name is among the most important intangible assets of an enterprise. Coco-cola, IMB and Microsoft are three of the most valuable brand names in the world, reportedly worth over USD50 billion each. A few years ago, the local Hong Kong brand name Crocodile was involved in a trade mark dispute with the French Lacoste company in Hong Kong and China. A business corporation should have the basic understanding of what constitutes a trade mark and how to effective enforce its trade mark rights, in order to capture this valuable intellectual property and avoid legal dispute. This practical guide will give a brief account of the trade mark system in Hong Kong and elsewhere, and the tips in obtaining an effective protection. 4
6 2. Fact Sheet of Hong Kong Trade Mark Governing Ordinance Trade Marks Ordinance (Cap.559) Filing System First-to-use Territorial protection Protection restricted to Hong Kong only. Registered mark in China, Taiwan and Macau has no protection in Hong Kong. Filing in series Available, maximum 4 series in an application (Marks in series should be very similar to each other and can only differ as to minor matters of a non-distinctive character.) Classes 1-45 (NICE classification applicable) Filing in multiple classes Yes Official fee HK$1,300 for first class; HK$650 for each additional class 5
7 Power of Attorney Not required Period of priority claim 6 months, no certified prior application document required Protection period 10 years from application date, renewable Examination on absolute grounds Yes Examination relative grounds on Yes Opposition period 3 months, before registration Use requirement Subject to revocation if mark not being used for 3 years Assignment / License Recordable within 6 months Collective mark Yes Certification mark Yes Defensive mark Yes 6
8 Non-traditional mark Sound, colour composition, smell, shape of goods are registrable subject to whether mark is graphically representable and sufficiently distinctive. 3. Why are trade mark registrations in Hong Kong important? Hong Kong is known as the shopping paradise and a trend-setting city for fashions, luxury goods and technology gadgets. Consumers from mainland China and overseas come to Hong Kong to look for the newest release from the fashion brands and the most updated products in the industry. Consumers are confident in the products sold in Hong Kong being genuine products and sold at a reasonable price. Brand names are protected by the Trade Marks Ordinance (Chapter 559) in Hong Kong. Owners of registered trade marks can prevent unauthorized parties from selling or dealing with goods using their trade marks. Brand name owners may obtain injunction from Court to restrain the unauthorized use of the registered trade marks and claim damages. They may also require the Hong Kong Customs and Excise Department to take raid action against the infringing activities in relation to the registered trade marks. 7
9 To be able the enforcement of the above rights in Hong Kong, the brand name owners have to register their brand names as trade marks in Hong Kong. 4. Registrability of Trade Mark in Hong Kong 4.1 What is the definition of trade mark in Hong Kong? Any sign which is capable of distinguishing the goods or services from one provider to another, and is capable of represented graphically are registrable as trade mark in Hong Kong. 4.2 What types of trade marks are registrable? The most common trade marks consist of words, names, logos, letters, numerals, characters (for example Chinese, Japanese, Korean characters) and colours. Some uncommon types of trade marks are sounds, smells and the shape of goods (3-dimensional marks) or their packaging, which require specific requirements to be fulfilled for registration. 8
10 4.3 What marks are not registrable in Hong Kong? Non-distinctive mark The most commonly rejected non-distinctive marks are those which are: a ordinary names for the goods or services (for example Marker for pen); b highly descriptive terms on the goods or services (for example Fresh & Clean for detergent); c common terms used in the industry (for example Network for computer goods); d laudatory words or slogans (such as Purewater and The best drinks on earth for distilled water). Solution: The only exception is that the Applicant can provide evidence to support that the mark has acquired distinctiveness through long period of use before the date of application. Such evidence should be provided in form of a statutory declaration. The average period suffice to support acquired distinctiveness is 5 years. A coined mark, that is, a new word created by the Applicant, is more distinctive on its own and can usually avoid being rejected by this ground. 9
11 4.3.2 Mere geographical origin Mere geographical origin is not registrable as trade mark in Hong Kong. Solution: A mark containing a distinctive element in addition to the geographical origin is generally registrable in Hong Kong, subject to the requirement to disclaim the exclusive use of such geographical origin Mark identical or similar to mark(s) registered Examiner conducts search not only in class(es) being applied in, but also the related classes, to check if identical or similar marks have been registered. It is therefore a good practice to conduct a trade mark search before filing application. solution: The Trade Marks Registry will allow registration if the Applicant can provide a Letter of Consent signed by the owner of the cited mark. Alternatively, the Applicant may file evidence to show that there has been honest concurrent use of the mark in Hong Kong before the application date of the cited mark. Such evidence should be provided in form of a statutory declaration. 10
12 5. Classification Trade marks are registered in different classes (for example clothing, toys, watches, insurance etc.) depending on the goods or services the marks are used for. Usually a brand name will cover products or services which span over more than one class. Some goods are not so obvious as to which class(es) they belong to. The applicant should carefully select the relevant classes when filing application. It should be noted that even a mark has been registered by another party, it may not affect your registration if your mark is not applied in a related class. 6. Trade Mark in Chinese Character Since over 95% of Hong Kong consumers use and speak Chinese, it is very likely that a trade mark will be referred to in Chinese by consumers. If a mark is in English or other languages, it is important to also register the mark by its transliteration or translation in Chinese characters as its official mark in Chinese, and use that Chinese mark in trade. Such registration in Chinese will prevent any unwanted Chinese name created and referred by consumers, and secure that the official brand name in Chinese will not be registered by another party. As mainland Chinese use simplified Chinese characters and local Hong Kong consumers use standard Chinese characters, it is suggested that the Chinese mark should 11
13 be registered in both simplified and standard Chinese characters. 7. Trade Mark Protection in Hong Kong 7.1 What are the rights of a trade mark owner? A trade mark owner has the exclusive right to use the registered trade mark in the course of trade or business. He has the right to take legal action under the Trade Marks Ordinance against any infringing or unauthorized use of his trade mark. 7.2 What constitutes infringement of a registered trade mark? The unauthorized use of any mark similar or identical to a registered trade mark in the course of trade or business on identical or similar goods or services registered under the registered mark, and which causes confusion to the consumers, constitutes trade infringement. The above use includes:- a applying the mark to goods or their packaging; b offering goods for sale under the mark; c putting goods on the market under the mark; d stocking goods under the mark for sale; 12
14 e supplying services under the mark; f importing or exporting goods under the mark; and g using the mark on business papers or in advertising. 7.3 What remedies are available for trade mark infringement? The registered trade mark owner is entitled to the following relief:- a Damages; b Account of profits; c Injunction; d Delivery up of infringing goods. 13
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16 8. Squatters and Trade Marks 8.1 Trade Mark Squatting Trade mark squatting is getting more and more popular in Hong Kong. Squatters usually identify trade marks of the upcoming brands in Europe and US which have not been popular in Hong Kong, and register the marks for selling to the brand name owners at high price. Recently, the PRC famous marks are also the target of the trade mark squatters. An early registration of trade mark by the brand owner is the most effective way to protect its mark from trade mark squatting. 8.2 Company Name Squatting It is relatively easy to register a company in Hong Kong. In order to allow companies to be incorporated efficiently, the Hong Kong Companies Registry only conducts search for identical company names in the Companies Register and rejects such names, and does not conduct any trade mark search or require any proof of trade mark registration in relation to the company name. In short, it is easy for anyone to register a company name consisting of a famous brand, and it is up to the brand owner to take any necessary action. In such bad faith registration of company name, the Hong Kong trade mark registration will be the prima facie evidence that the brand owner is trade mark owner in Hong Kong. The brand name owner may base on its registered trade mark to take Court action against such misuse of the 15
17 brand name in the company name and obtain an injunction. Without the trade mark registration, the brand name owner can only rely on passing off action, which requires the proof of its goodwill in Hong Kong. It will not be easy to fulfill such requirement it the brand is still relatively new in Hong Kong. 8.3 Domain Name Squatting Domain name registration is another popular area for squatting. Dispute in relation to this kind of domain name registration in bad faith can be effectively dealt with by arbitration. What the arbitrator looks for in the first place is whether the disputed keyword in the domain name has been registered as a trade mark to show that the claimant has proprietary interests in the domain name. A trade mark registered owner can effectively base on its trade mark registration to demand the domain name squatter to transfer or deregister the domain name being registered in bad faith. 9. Un-registered Trade Marks If the trade mark user has used the marks for a period of time without registering the mark, it may still rely on the common rights established from its use to deter others from using the mark in the related business. The rights owner will need to provide extensive evidence to show that sufficient goodwill has been acquired through its use in 16
18 Court and cannot rely on the Hong Kong Trade Marks Ordinance (Cap.559) to enforce its rights. A trade mark registration is a prima face evidence that the registered owner is entitled to the protection under the Hong Kong Trade Marks Ordinance. Therefore, it is not necessary for the claimant to prove its goodwill in Court if the trade mark has been registered. A Hong Kong registered trade mark can prevent others from registering an identical or similar trade marks in Hong Kong, including bad-faith registration, as the Hong Kong Trade Marks Registry will conduct a search for identical or similar registered trade marks as a standard procedure before approving the registration, and reject the application if identical or similar marks are located. Unregistered trade marks are not within the scope of its search. The rights owner can only rely on opposition to prevent registration of such marks (see Chapter 14). 10. Search and Registration Requirements 10.1 Search A trade mark search can save an applicant unnecessary application and official fee. The search is conducted to check whether any marks identical or similar to the proposed mark have been registered, and to assess the chance of successful registration, before filing the application which will incur further application and official fee. The applicant may then amend the mark accordingly 17
19 to avoid being similar to other existing registered trade marks. As many common words have now been registered as trade marks, the search is particularly necessary if the trade mark contains any common words, and should be conducted in each relevant class. We also provide a registrability opinion with the search result Particulars of the Applicant The Applicant may be an individual or company. The Applicant should provide its name and address in Chinese or English, and a copy of the Certificate of Incorporation or Business Registration Record (for company), the Hong Kong Identity Card (for Hong Kong citizen), or the Passport (for overseas citizen) for verification Trade Mark The Applicant should provide a soft copy of the mark if it includes a logo or any graphical design Class and Specification of Goods/Services The Applicant should provide a list of the current or anticipated goods to be sold under the mark for the determination of classes and drafting of the specification of goods/services. In many circumstances, the mark should be registered in more than one class of goods, or also in the classes of services (for example retailing services) in order to obtain a full protection. It is recommended to 18
20 provide the Applicant s website or brochure for us to ascertain the classes and draft the specification of goods/services. 11. Application Procedure It generally takes about 6-7 months from filing application to obtaining the trade mark certificate for a smooth application. An application may be rejected by the Examiner during the examination (office action). The Applicant will then have 6 months to file a response to the office action to convince the Examiner that the mark should be allowed for registration. An application may also be opposed by any third party during the 3-month opposition period after the Examiner s approval and the publication by the Trade Marks Registry. If the mark is opposed, the application will enter into the opposition proceedings and subject to the decision of the opposition (please refer to Chapter 8 of this Guide). The following flowchart summarizes the application procedure and the estimated time frame:- 19
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22 12. Claiming Priority 12.1 What is claiming priority? Within 6 months from the first filing of a trade mark application in any countries which is a member of the Paris Convention, the applicant may file a subsequent trade mark application in another member state of the Paris Convention, claiming the earlier filing date as the application date for the present application, for the same mark and same goods and services What is the advantage? The advantage is that when the Examiner searches for similar and identical marks, only the marks registered before the earlier application date will be cited for rejection. In other words, any marks filed by another party between the earlier filing date and the actual filing date of the present application will not be cited against the present application. Since an applicant may not be able to register the trade mark in all countries at the same time, claiming priority provides a way against bad faith registration which targets at the upcoming brand names with potential. It is recommended to claim the priority to secure the successful trade mark registration. 21
23 12.3 What is required for claiming priority? For claiming conventional priority in a Hong Kong trade mark application, we need to know the filing date, the country, and the application number of the earlier application, and a copy of the earlier application document or filing receipt for verification. 13. International Trade Mark Registration Trade mark registration is territorial. In other words, a trade mark has to be registered in each country you seek protection in. There is no one single trade mark registration which can cover all the countries. There are two distinct trade mark systems, the Community Trade Mark (CTM) system and the Madrid system, which make it easier for an applicant to register a mark in various countries Community Trade Mark (CTM) System What is CTM? The Community Trade Mark system is managed by the Office for Harmonization in the Internal Market (OHIM) and allows a single application to cover 27 countries of the European Union (EU) including Austria, Benelux (Belgium, the Netherlands and Luxembourg), Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, 22
24 Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Malta, Poland, Portugal, Romania, the Slovak Republic, Slovenia, Spain, Sweden and the United Kingdom. There is only one single examination by OHIM on the registrability of the mark. Once approved, the mark will be open to opposition for 3 months. The registration automatically covers all the said 27 EU countries What is the advantage of CTM? CTM is a relatively economical way to register trade mark in the EU countries, compared to filing separate application in each EU country. In term of costs, it is recommended to apply for CTM registration if the applicant will apply for 3 or more EU countries What is the disadvantage of CTM? The main disadvantage is that if the mark is being successfully opposed by a trade mark owner in any of the 27 countries, the whole application will fail. The CTM registration is a unified right throughout all 27 EU countries, and cannot be elected to cover only some of the countries Madrid Trade Mark System What is Madrid System? The Madrid Trade Mark System is managed by the World Intellectual Property Office (WIPO) and operated under the 23
25 Madrid Agreement and the Madrid Protocol. The applicant has to be a national of, domiciled in or has a real and effective industrial or commercial establishment in a contracting state. The Madrid application will base on the home trade mark application or registration of the applicant. Most countries are now contracting parties of Madrid Agreement and/or Madrid Protocol. Currently, Hong Kong, Macau, Taiwan, Thailand and Canada are still not parties to the Madrid System What is the advantage of Madrid System? Trade mark application through the Madrid System is a relatively economical way to register trade mark in the Madrid countries, compared to filing separate application in each corresponding country What is the disadvantage of Madrid System? In the first 5 years, the subsequent registrations in the Madrid countries depend on the home registration. In other words, if the home registration is invalidated, the registrations in the other Madrid countries will fail as well, except in some cases, the registration in the subsequent Madrid countries may be transformed to a national registration. As Hong Kong is not yet a party to the Madrid Agreement or the Madrid Protocol, Madrid System is generally not applicable to a Hong Kong individual or company. 24
26 13.3 US Trade Mark Registration As US is one of the largest markets in the world, it is recommended to consider US as a country for obtaining trade mark protection. It is worth noting that the USPTO (US Trademarks Office) requires that the Applicant to file a Declaration of Use of the mark in the US before it will complete the registration. In other words, the applicant has to have the mark actually used in the trade on the goods applied for registration before the USPTO will grant the registration. However, the applicant may file request for time extension for up to 3 years for filing such Declaration China Trade Mark Registration The trade mark registration of China is completely independent with the Hong Kong trade mark registration. In other words, a Hong Kong registered mark (not registered in the PRC) is not entitled to protection in China and vice versa. A separate registration must be filed in China to obtain trade mark protection in China. Bad-faith trade mark registration is a serious issue in China. It is recommended to always conduct a search before filing registration, and to file registration for famous or emerging brand names as soon as possible. For a trade mark in English or other non-chinese language, it is also recommended to file a corresponding trade mark in Chinese to protect its name in Chinese, before someone else registers it to take advantage. 25
27 14. Trade Mark Opposition and Invalidation 14.1 What are opposition and invalidation? Once a trade mark application is approved by the Hong Kong Trade Marks Registry, the application will be published on the Hong Kong Intellectual Property Journal. Any party may file an opposition of the application within 3 months from the publication date. If no opposition is filed, the mark will be successfully registered. Even after the 3-month opposition period, a registered trade mark may still be invalidated subsequently. Some of the grounds applicable for opposition can be applied in invalidation. However, the proceedings for opposition are much simpler if the applicant chooses not to defend the case (Please refer to Section 8.3.1) What are the usual grounds for opposition (and invalidation)? Similar to earlier registered trade mark The Opponent should have a similar Hong Kong registered mark registered in similar or identical goods/services as those applied under the subject mark, and it has to prove that the subject mark is likely to cause confusion to the consumers. If the goods registered by the Opponent are very different from the goods/services under the subject mark, the Opponent has to further prove that its mark is a well-known trade mark in Hong Kong. 26
28 Passing off If the Opponent does not have an earlier registered mark in Hong Kong, but has used its mark in business in Hong Kong for certain extent, it may allege that the use of the subject mark will constitute passing off against its goods/services. The Opponent will need to prove it owns sufficient goodwill in Hong Kong and the use of the subject mark constitutes misrepresentation Bad faith application There are more and more trade mark applications in Hong Kong in relation to some famous (or to-be-famous) brand names in the PRC or overseas filed by some unrelated parties, with a view to gain advantages from the genuine trade mark owners. Usually it is required to establish that the applicant is aware of the Opponent s mark before filing application. The application should be considered a dishonest act under the standards of acceptable commercial behaviour observed by reasonable and experienced business men. It is advisable that a trade mark owner of famous mark in the PRC or overseas also files trade mark application in Hong Kong to protect its mark from bad-faith application Non-use A Hong Kong trade mark may be revoked if it has not been put to genuine use in Hong Kong for over 3 years. 27
29 Generic Names The trade mark owner should prevent the use of its mark from being used as a generic word. An example of such mark is Botox which is gradually becoming a generic term for the Botulinum toxin preparations being used in cosmetic procedure for removing wrinkles. Once a mark has become a generic term in the industry, it may not be entitled the trade mark protection What are the procedures? Opposition Procedure Stage 1: The Opponent files Notice of Opposition with the Opposition Grounds. The Applicant will file Counter-Statement within 3 months. Otherwise, the application is deemed to be abandoned by the Applicant. Stage 2: The Opponent files Declaration for Evidence within 6 months from filing the Counter-Statement by the Applicant. The Applicant will file Declaration for Evidence within 6 months. Stage 3 (Optional): The Opponent may file further Evidence in reply of the Applicant s evidence within 6 months. 28
30 Stage 4: The case will be scheduled for a hearing. Sometimes a Counsel will be engaged to appear in the hearing if complicated issues are involved in the case Invalidation Procedure The invalidation procedure is similar to that of opposition, except the case has to proceed through stages 2-4 even if no Counter-Statement is filed to defend the case. The following flowchart summarizes the opposition/ invalidation procedure and the estimated time frame:- 29
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32 15. Infringement and Litigation 15.1 Civil Action To commence a civil action on trade mark infringement in Hong Kong, the complainant must be able to produce the basic evidence of infringement, for example, the infringing goods or the related promotion materials, the receipt of such goods/ promotion materials identifying the seller/ distributor, the date and the location of the sale or distribution. Sometimes an investigator will be engaged to conduct the collection of evidence. The complainant should have a valid registration of the trade mark covering the goods being infringed. In most circumstances, a cease and desist letter will be sent to the infringing party to demand the infringing activities to be ceased immediately, and any infringing goods to be delivered up to the trade mark owner. If the infringing activities continue, the complaint may commence court action to obtain injunction and damages. To support the case, a witness statement or affirmation describing the infringing activities, in particular, the purchase of the infringing goods by the trade mark owner and the infringing activities has to be produced. The trade mark owner should keep detailed records of the purchase of the infringing goods. In addition to damages or account of profits, costs incurred in the legal proceedings can be claimed against the infringing party. 31
33 15.2 Criminal Action The complainant may also report to the Hong Kong Customs and Excise Department to request a raid action against the infringing party. The Customs may initiate criminal proceedings against the infringing party. However, the burden of proof is of a much higher standard compared to that of a civil action. Upon receiving the complainant, the Customs officers will conduct investigation and evaluate the case to determine whether to conduct any raid action. The pursuit of criminal action will highly depend on the evidence collected during the raid action. 16. Our Trade Mark Practice We are experienced in handling Hong Kong and worldwide trade mark registration, including conventional trade marks and non-conventional trade marks such as slogan mark, certified mark and 3-D mark. We have successfully convinced the Examiners in many office actions and registered many difficult trade marks which have been objected by the Trade Marks Registry. We give advice on to how to design and register trade marks in order to give the best protection. We are experienced in prosecuting trade mark opposition and invalidation, and representing clients in the opposition and invalidation hearing. We have successfully opposed and invalidated many trade mark registrations in Hong Kong, including many famous marks being registered in 32
34 bad faith. We also provide trade mark watch service on marks which are identical or similar to your marks. We enforce trade mark rights for our clients against trade mark infringement, and obtain court injunction to require trade mark infringing companies to amend their company names which include our clients registered trade marks. We also file complaint to the Customs and Excise Department to take criminal action against trade mark infringers. We are a member of the International Trademark Association (INTA) and have the international network to process trade mark registration anywhere in the world. We see each trade mark as a corporation s most important asset. We treat each trade mark seriously and use our expertise to provide you with the best trade mark protection. 33
35 contact us For enquiries, please contact members of our intellectual property department: hans lee partner chartered patent attorney (UK) head of the ip and technology department direct line: (852) ludwig ng enior partner direct line: (852)
36 derek lau senior associate direct line: (852) derek.lauonc.hk 35
37 ONC Lawyers is a professional and dynamic legal practice based in Hong Kong. We have been growing continuously since our establishment in 1992, and have now become one of the largest local law firms with more than 90 members of legally-qualified and supporting staff. We offer a full range of legal services to both corporate and individual clients, including:- Capital Market Insurance & Personal Injury China Attesting Services Intellectual Property & Technology Banking & Finance Litigation & Dispute Resolution China Practice Notary Public Services Construction & Arbitration Corporate & Commercial Property Securities, Futures & Funds Criminal Litigation Shipping & Logistics Employment, Privacy and Discrimination Trust Family & Matrimonial Venture Capital & Private Equity Immigration Wills & Probate Insolvency & Restructuring If you have any enquires, please feel free to contact us at (852) or onc@onc.hk. 36
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